News / How to process an extra million-plus parcels a day from China into the US

US customs officials are scrambling to find a workable solution to the sudden suspension of the exemption for de minimis goods from China.

President Trump has revoked Chinese shippers’ access to the exemption, permitting items valued at less than $800 into the US without facing duties or taxes, as part of a wider assault on the flow of foreign goods imports.

While the planned suspension for goods from Canada and Mexico was temporarily lifted, Chinese shippers and their supply chain operators are playing catch-up in an effort to avoid mass congestion.

Some four million packages a day came through under the de minimis exemption prior to the change, roughly two-thirds from China.

Director of product development at ePost Global Alison Layfield told The Loadstar: “There is significant uncertainty. USPS, for example, does not have a collection method in place yet and is working with Customs to figure it out, we understand.

“[Logistics operators’] customers are asking what needs to be done, but nobody has definitive answers yet. It is a constant back-and-forth, changing daily.”

USPS briefly suspended shipments from China into the US, before swiftly backtracking, which one source said was indicative of the chaos brought on by the president’s executive order.

John Lash, group VP of product strategy at supply chain platform e2open, told The Loadstar that “it still remains to be seen how duty will be paid on these [now taxable] packages”. And he added: “There is also the cost of filing formal declarations for such a huge volume of small shipments from China.

“One thing for sure is that it will be more than just the 25% tariff. One company reported it would increase costs by 50%.

“Two questions arise: will consumers bear the additional cost; and how will this affect businesses?”

He added that with much of the burden falling on US customs officials and forwarders to manage and process filings, efficiency and productivity would take “a big hit”.

Scott Sangster, general manager for global logistics services providers at Descartes, told The Loadstar logistics operators’ short-term focus would be on accurate reporting of security requirements and calculating tariffs for the shipments no longer eligible for de minimis exemption.

And citing a lack of a “clear process” for this, Ms Layfield said a likely outcome would be a slowdown in customs processing, which would create “significant delays”.

She added: “If Customs cannot keep up, it could impact airfreight capacity by clogging up the supply chain at entry points. And while not a full work stoppage, it would result in major bottlenecks.

“There’s real concern that, if congestion worsens and Customs starts rejecting shipments due to unmanageable backlogs, we’ll see shifts in global supply chain patterns.”